Business Credit Cards with No Personal Guarantee are Essential for Entrepreneurs
Starting a business involves a lot of financial decisions, one of which is getting a credit card. A credit card can help you manage your expenses and keep your personal and business transactions separate. However, most credit cards require a personal guarantee, putting your personal assets at risk if you can’t pay off the debt. That’s why business credit cards with no personal guarantee are a smart option for entrepreneurs. In this article, we’ll discuss why these credit cards are essential for entrepreneurs.
What is a Business Credit Card with No Personal Guarantee?
A business credit card with no personal guarantee simply means that the credit card issuer does not require the owner to be held personally liable for any outstanding debt. Instead, the credit card issuer relies solely on the creditworthiness of the business, which is determined by factors such as revenue and credit history.
Why Should Entrepreneurs Consider a Business Credit Card with No Personal Guarantee?
1. Protection of Personal Assets
By opting for a business credit card with no personal guarantee, entrepreneurs can protect their personal assets. Unlike personal credit cards where the owner is responsible for the outstanding debt, with a business credit card, only the business is responsible for the debt. This means that if the business is sued or goes bankrupt, the owner’s personal assets, such as their house or car, are not on the line.
2. Easier to Qualify for
Another benefit of a business credit card with no personal guarantee is that it is easier to qualify for. Since the credit card issuer is solely relying on the creditworthiness of the business, entrepreneurs with a limited credit history or new businesses without established credit can still get approved for a credit card.
3. Helps Build Business Credit
Using a business credit card helps establish and build business credit. Business credit is a separate entity from personal credit and having a good business credit score can help entrepreneurs secure loans, leases, and other financial products in the future. With a business credit card, entrepreneurs can establish a credit history for their business and improve their credit score by making timely payments.
Examples of Business Credit Cards with No Personal Guarantee
There are several business credit cards that do not require a personal guarantee. Here are some options:
1. Capital One Spark Classic for Business: This card has no annual fee and offers unlimited 1% cash back on every purchase.
2. American Express Blue Business Cash Card: This card has no annual fee and offers 2% cash back on all eligible purchases up to $50,000 per calendar year.
3. Discover It Business Card: This card has no annual fee and offers 1.5% cash back on all purchases with no cap.
Conclusion
In summary, a business credit card with no personal guarantee is essential for entrepreneurs looking to protect their personal assets and establish business credit. These credit cards are easier to qualify for and help entrepreneurs improve their credit score. With several options available, it is important to research and compare business credit cards to find the one that best suits your business needs.
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